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By
Dr. Drumm McNaughton.
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Jeri Prochaska and Tom Netting of CSPEN, the Central States Private Education Network, represent higher ed institutions nationwide to public policymakers in Washington and throughout the nation. CSPEN is focused on making sure that the education industry has all the information that’s coming out of Washington. They believe communication is the key, thus allowing the industry to advocate for itself.

Here’s their latest from what is going on in Washington.

Legislative Gridlock Over the HEA Results in Regulatory Guidance. In the absence of action from both houses of Congress, we are seeing the Trump administration pushing through political agendas through as regulation in lieu of statutory guidance, and they have been massive. This is no more evident than in the reauthorization of the Higher Education Act.

Under the law in 1955 reauthorization of the Higher Education Act is supposed to be reauthorized process to bring it up to current day every 5-6 years, but this latest renewal did not get as far as it should have. The House completed mark up but did not bring a bill to the floor, and the Senate didn’t get that far despite having multiple hearings. Given the legislative stalemate and partisanship in Congress, the HEA is not expected to come to a vote until 2019 or 2020.

Negotiated Rulemaking. Negotiated rulemaking is the process by which the Department has individuals from higher education and interested communities come together to discuss proposed changes to regulations. The negotiated rulemaking process for the borrower defense to repayment regulations, gainful employment regulations, and others areas have been going on, but the proposed rules have not yet come out.

The next round of negotiated rulemaking will take place in January – March 2019, focusing on “accreditation and innovation,” with subgroups focusing on online education, definition of credit hour, direct assessment, competency-based learning, and how all of those are delivered and how federal financial aid might be utilized in the delivery of all those different modalities. That process will conclude with the development of regulations that are proposed, probably mid-summer 2019 and published in final form by November 2019 with them going into effect July 1, 2020. To find out more, go to the Department of Education website. The deadline for application to participate is Nov 15.

Borrower Defense to Repaying (BDR). Many of the regulations including the borrower defense to repaying regulations and gainful employment, that were put in place by the Obama administration are being contemplated for revision or repeal by the Trump administration.

In instituting the borrower defense to repaying, the Obama administration took the fundamental premise that if a student was defrauded because of a school employing illegal or deceptive practices that encouraged them to take out student loans to attend that school, their student loan should be forgiven. The Trump administration challenged this, but the courts have ordered the administration to continue with this process until new regulations are put in place. Because of the timeframe, this will not happen until mid-2020.

Of the 32,601 applications received by the end of June, only 96 borrowers have actually had their debt canceled. Ninety-nine percent of the applications that have been processed were denied.

Two decisions were recently handed down by the courts along these lines. The first stated that student who didn't file an application is not eligible for relief, that only those who followed through on the opportunities afforded them by the Department can seek relief. Over 100,000 have done so.

The second decision stated that regulatory stays and a repeal of the delay in the implementation of those regulations the Trump administration has put into place are no longer valid – it was deemed to be arbitrary and capricious – the result is that those regulations that were scheduled to take effect in 2016 actually went into effect on October 12.

What we’re seeing is that the needed guidance in this transitional period is lacking, and the new administration needs to tell everyone how the regulations should be implemented while developing the new regulations that set asunder the interim guidance.

Gainful Employment. Similar to the borrower defense to repayment and final rules that we had hoped would be published in final form by November 1, the BDR court cases indicated that the Department would not meet their November 1 deadline for either borrower defense or gainful employment. That means that regulations that have been in effect and gone through two iterations of review under the Obama administration (2009 and 2012/14), are in place and will remain so while new regulatory proposals that would eliminate the loss of eligibility under certain criteria will be potentially repealed. Those regulations will not go into effect until July 2020.

There is some belief that under statutory authority and regulatory capability that the Secretary of Education might provide an opportunity for early implementation of some of the changes under the gainful employment rule, but we must wait and see what the Department publishes in their final regs which are likely to come out before the end of the year. Additionally, it is unknown whether schools will have the opportunity for early implementation and what that timeline might be as opposed to the normal implementation of July 2020.

Credit Hour. The higher education community has been waiting for their turn in line with the Department to focus on issues related to changes made by the Obama administration on how to calculate the number of hours of outside preparatory time and other facets of what goes in the determination of a credit hour. This has a significant impact on federal financial aid and online education. This will be taken up in the next round of negotiated rulemaking.

Bullet Points: Drill down on key points of the interview:

Expect the Higher Education Act to be renewed in 2019 or 2020

The courts are stepping in on the Borrower Defense To Repayment in multiple ways, blocking changes until 2020.

Negotiated rulemaking is proceeding slowly in the cases of BDR and Gainful Employment. Expect guidance to come out by the end of Nov 2018.

A new round of negotiated rulemaking will begin in Jan 2019, focusing on accreditation and innovation, with subcommittees on online education, a definition of credit hour, direct assessment, competency-based learning, and how all of those are delivered and how federal financial aid might be utilized in the delivery of all those different modalities.

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